T The Malaysian Opposition Chief Mahathir Mohamad, during his 22-year tenure as prime minister, welcomed foreign direct investment from East Asian economies such as Japan, Taiwan and South Korea. Why is he so nervous about the billions? of dollars of Chinese money now flowing into the country?
That's the question that Prime Minister Najib Razak and his supporters ask when they try to arrest the 92-year-old, because he claims that the anti-China dog will win crucial Malay votes in the next week's general election.
The issue has not been prominently featured in the campaign so far, as opposition candidates recognize that voters are much more concerned with hot topics such as the rising cost of living and the unpopular Goods and Services Tax (GST).
Those in Mahathir's camp say the premier's criticism is a distraction, and they point out that their leader's concerns are limited to certain China-sponsored projects.
With regard to Sri Lanka's current debt problems, they are asking whether Malaysia can bear the burden of Chinese loans if projects go awry.
Mahathir has also expressed resentment over China-backed luxury real estate projects to attract foreign investors instead of increasing local housing needs.
The opposition leader's recent statements to the international media that he would "review" projects related to China if he came to power left Najib hard hit this week.
"If you piss off the relationship with the Chinese government and China, the implication is very, very serious," Najib was quoted during the election campaign in the Borneo state of Sabah.
Under the supervision of the Prime Minister, Chinese investment has increased in the country.
Singapore was the main source of foreign direct investment (FDI) in 2017, followed by the Netherlands, Japan, the United States and Hong Kong, according to DBS Bank data released Friday. China ranked sixth, bringing $ 2.36 billion or 7.1 percent of total foreign direct investment to Malaysia.
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The rise in foreign direct investment from China and elsewhere comes under pressure from Najib to restructure an economy that once relied heavily on oil revenues.
Oil revenues accounted for 41 percent of total government income when he came to power; A New Economic Model introduced in 2010 reduced that figure to 14 percent of a $ 225 billion ringgit economy ($ 57 billion).
Najib said the cancellation of one of China's deals would have "far-reaching" implications for Southeast Asia's third largest economy.
"China could take revenge and stop buying our palm oil, bird's nest, and stop sending tourists to Sabah," he told Chinese supporters in the semi-autonomous state. He added, "We must have good relations with China, the United States and other countries to help us, what happens if they become enemies of us, what is the benefit for us?"
Mahathir, who was born in the 1980s and 1990s introduced a "Look East" policy, could not be commented, but his allies said this week in Asia that his position was more nuanced than the Najib camp it seemed.
"Given China's role in Southeast Asia, it would not be wise to take over China … these are project-specific concerns about sustainability, profitability and costs," said Charles Santiago, an opposition MP for his third term in office at Klang the terminus for a controversial China-supported rail link.
And Syed Saddiq Syed Abdul Rahman, one of Mahathir's closest collaborators and a candidate for parliament, said there was "nothing xenophobic" about the former Strongman leader's reservations about Chinese investment. "It's about whether it benefits other Malaysians … even when we got loans from the Japanese during Mahathir's time, interest rates were ridiculously low and there was technology transfer," he said This Week in Asia .
Mahathir's criticism of Chinese investment focuses on Najib's signed or endorsed unilateral agreements, which are synonymous with "selling the land."
The two projects he most vividly protests against are the $ 100 billion Forest City mixed development in the state of Johor and a $ 13 billion East Coast rail link connecting the country's underdeveloped eastern coast with Kuala Lumpur.
Mahathir says the high-end real estate project – a joint venture between China's Country Garden and Johor's Sultan Ibrahim Ismail – does not benefit ordinary Malaysians. Developed apartment complexes, built on man-made open land near affluent Singapore, cost at least 1 million ringgit – far beyond the reach of most people in a country where half of its workforce earns less than 2,000 ringgit per month.
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The 688 km long railway line is now attacked by the opposition chief on three fronts: his award without a tender to the China Communications Construction Company (CCCC), his argument that his price is bloated, and the decision of the Najib government to exempt the project from paying VAT.
Najib said last month that CCCC was involved because it offered the best possible deal, including a seven-year deferment of loan payments. Eighty-five percent of the project will be funded by a loan from the Chinese export-import bank at an interest rate of 3.25 percent – much lower than the rates of most international lenders to Najib – and the rest will be backed by Islamic Sukuk bonds issued to local banks.
CCCC said This week in Asia it signed the deal with the Malaysian government "based on the market price" and after negotiations "following the instructions for this type of projects".
The tax question states: "As the Malaysian tax authorities have already stated, the Exemption from the Goods and Services Tax (GST) served to reduce project costs." It was a decision between the two governments, with the good intention to help the public in Malaysia. "
In China, experts say that the excitement will dissipate after the elections, whether it's the current government or the government's opponents who win.
"Malaysia needs foreign investment for its infrastructure projects, no matter which party is in power, they all need to advance the economy … so I am confident that each side will continue economic cooperation [with China]," Lu said Jinyong, a researcher on Chinese FDI at Beijing University of International Economics
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And it's not just Chinese money that will finance Malaysia's burgeoning demand for new infrastructure.
In a commentary this week, Mah Siew Keong, one of Najib's three ethnic Chinese cabinet ministers, said, "The Chinese investment in Malaysia is cumulatively just a fraction of the investment from other countries." He said investment from Japan The International Cooperation Agency alone has been around 33 billion ringgit since the Mahathir era.
Regarding the criticism of Chinese FDI, he said it was "unfair to filter out a specific country in relation to FDI in order to reach political milestones."
The reality is that the opposition is relying on the support of Chinese voters, with the coalition member, the Democratic Action Party, counting them as their main constituency, despite their multi-ethnic ranks over the last decade dramatically increased.
A too critical attitude towards Chinese investment could create disagreement that they can not reduce in time for the polls.
More critically, the country's leading pollster, Ibrahim Suffian, said earlier polls show "by and large Chinese investment in the economy" is viewed as positive and people welcome it. "
In one country, in As the unspoken leitmotiv of all political discussions is a race, public support for this particular issue across the ethnic divide was surprisingly consistent, according to figures from Ibrahim's Merdeka Center Think Tank.
Ibrahim said that any anxiety is likely to be a "minor one." Minority ", which was concerned about whether accepting Chinese money would give Beijing" leeway "over Najib, or whether it would harm the country's sovereignty.
He said," Will this [issue] make the difference? important factor for the election result? I do not believe that. " ■